This Niche Tech Stock Dropped 50%, but Its Revenue Model Means It's Poised for a Comeback

Core Viewpoint - Investors have largely focused on artificial intelligence (AI) in 2025, leading to the neglect of fintech companies like Alkami Technology [1] Company Overview - Alkami Technology operates a cloud-based digital banking platform, primarily serving U.S. community banks and credit unions that lack the resources to develop their own systems [3] - The platform integrates onboarding, digital banking, data, and marketing into a unified solution for clients serving millions of customers [3] Business Model and Financial Performance - Alkami's revenue model is subscription-based, with approximately 96% of revenue derived from recurring sources, mainly from its software-as-a-service (SaaS) model [4] - Annual recurring revenue (ARR) reached $449 million in Q3 2025, showing significant growth from the previous year, providing stability and visibility into future cash flows [5] - Registered users of Alkami's platform increased to 20.9 million, indicating broadening and deepening adoption, which is crucial as pricing is often tied to user growth [6] - Revenue growth has been notable, with Q2 2025 revenue increasing by about 36% year over year and Q3 growth at 31.5% [6] Stock Performance and Market Reaction - Alkami's stock price fell to $21.80, approximately 50% below its highs from late 2024 and early 2025, primarily due to missed earnings estimates in Q2 2025 and cautious management guidance [2][7] - Despite strong revenue growth, the earnings per share did not meet Wall Street expectations, raising concerns about potential slowing growth [7][8]